We're watching an American retirement crisis unfold
Advertisement
Jordan Parker Erb
Mar 27, 2024, 19:46 IST
Boomers are quickly approaching retirement and about to exert their "peak burden" on the US economy.pidjoe/Getty Images
This post originally appeared in the Insider Today newsletter.
Advertisement
Welcome back! This is Jordan Parker Erb, filling in again for Dan DeFrancesco. Haven't voted in our tech and biz March Madness bracket? Don't worry — you can still make your choices here.
What was once a natural part of the American dream — retirement — is now a luxury many workers can't afford.
It used to be that you could expect to put in a few decades of work and then enjoy a few more good years of rest. But more and more often, retirement-age people feel they've been left behind.
The problem is multifaceted. Pensions are disappearing. Social Security benefits are in peril. People are living longer than ever. As BI previously reported, fewer than half of all boomers have saved enough for retirement.
Mounting student-loan debt doesn't help, either. According to one researcher and associate professor of economics, this is the first generation of Americans that has taken on substantial student-loan debt for their children.
Advertisement
All of that combines to form a growing, and increasingly bleak, American retirement crisis. It has left at least one woman Juliana spoke to, who's in her 70s, worried she's "going to die" in the HR job she's still working.
With boomers' experience trying to retire playing out in front of them, it's no wonder some younger people are hustling to secure an early retirement.
BI has written at length about Gen Zers and millennials who have saved up to retire in their 30s or 40s. Some save up the majority of their paychecks, while others have cashed in on relocation bonuses.
But still, the reality is that most people can't expect to retire by 36. Plus, some who do leave work early end up regretting it. Unused to idle time and the sudden evaporation of their office relationships, some people quickly return to the office.
One woman who retired early said she could only do so because she moved to India, where the cost of living is lower. She said there was "no way" she could have done it in the US. Still, she wound up going back to work after an initial attempt at retirement.
Advertisement
While early retirement isn't for everyone, retirement at its most basic level — leaving work after most of our adult lives — should be. The notion that people who've done everything they were supposed to, and still can't retire, points to major problems in the system at large.
News brief
Your Monday headline catchup
A quick recap of the top news from over the weekend:
An investment firm says these two parts of the market still have huge upside. Investors should focus on the cheapest 20% of large-caps, as well as on non-US stocks, GMO wrote. The firm said these provide the best allocation opportunity in 35 years.
Warren Buffett's favorite market gauge just hit a two-year high. The "Buffett Indicator" — which just surged to 184% — compares the stock market's total value to the overall size of the economy. Buffett has warned that buying stocks at a reading near 200% is "playing with fire."
Sam Bankman-Fried is set to be sentenced on Thursday. Prosecutors want the disgraced FTX founder to serve 40 to 50 years in prison. His lawyers are asking for a much lighter sentence, arguing that FTX customers might get all their money back and flagging SBF's possible neurodivergence.
3 things in tech
Get ready for Generation Biz. The entrepreneurial landscape has changed dramatically in the last couple of decades. The new name of the game is branding and Gen Z is uniquely set up to succeed in today's digital-centric marketplace.
AI-powered Cherish Health has raised $26 million — without VC money. The company, which produces a radar-based fall detection device, is set to raise a $30 million Series B. Instead of raising money from venture capital firms, it worked with billionaires and other businesses. So far, it's paid off.
Apple is having a nightmarish year. The Department of Justice's antitrust lawsuit is just the latest of several events that may hurt the tech giant. Apple is also battling a tumbling share price, sluggish iPhone sales in China, and doubts about its AI efforts.
3 things in business
Work on drugs. Elon Musk is taking ketamine and people in tech are microdosing mushrooms. Drugs used to be for getting high — now people are using them to get ahead.
The American South is on a roll. Southern states are booming right now, thanks to an accelerating rise in population driving major economic growth. The region is beating out the West, once again, as the fastest-growing region in the US last year.
These are tough times for the consulting business. Major firms across the board appear to be struggling with waning client demand as the macroeconomic environment weakens. Accenture said on Thursday that it was cutting its revenue forecast for 2024, while Deloitte has kicked off a reorganization process in a bid to cut costs.
NewsletterSIMPLY PUT - where we join the dots to inform and inspire you. Sign up for a weekly brief collating many news items into one untangled thought delivered straight to your mailbox.